This is the start of the research essay / independent study. Introduction The Chinese steel industry is considered to be a pillar industry in China’s economy as it is vital to its economic development. Therefore, under the 10th Five Year Plan for National Economic and Social development (2001-2005), the Chinese government initiated massive amounts of subsidies to Chinese steel firms believing that it will be beneficial to the industry’s growth. Since then, the Chinese government has promulgated other plans that extended and increased many of the subsidies initiated. Though seemingly advantageous, the subsidies need not be beneficial. Thus, this paper will assess the impacts of state subsidies on the Chinese Steel industry and argue that subsidies have actually been detrimental than beneficial. Literature Review The steel industry is a …show more content…
Whilst the competitiveness of the Chinese steel industry has improved, the industry has experienced a backlash in the form of bad debt. Chinese steel firms are given subsidies, mostly in the form of subsidised loans, in order to help them increase their efficiency and improve the quality of their products. Through such a growth strategy, the Chinese government believes the Chinese steel industry will become more competitive. The subsidies have indeed created a competitive Chinese steel industry. The competitiveness of the industry can be seen in the 2013 Fortune Global 500, which ranks the world’s top 500 publicly-listed companies based on their competitiveness. 8 out of the 14 publicly-listed steel firms that appeared in the 2013 ranking belonged to the Chinese steel industry, indicating that the industry is indeed highly competitive in relation to the global steel
For decades, the steel industry has been one of the toughest markets on a global scale with most steel corporations ending up in bankruptcy. Foreign and domestic competitors, management issues, environmental issues, political agenda’s and technology have had much to do with the demise and more so of the success of the steel industry. The issues that this case focus on Nucor Corporation was of:
In 2001 China entered the WTO it has made major stride in the world economy especially with trade agreements with the biggest capitalist economy and the biggest GDP and most developed country in the world the United States of America which has nearly 2.3 trillion of exported goods and service in 2013 (President, n.d.) When China entered in the WTO it had become the sixth largest economy and the largest market trade and was slightly ahead of Italy and just behind France. “China is third largest trading partner with the U.S and its trade surplus with the U.S. has increased to $201 billion around 2005 and by 2014 the total China-U.S. trade deals was 591 billion”. (Morrison, 2015) It had a global current account of $160 billion around 2005 (Hufbauer, Wong, & Sheth, 2006). As of 2015 “China is the U. S’s second largest trading company and the third largest export company and its biggest source of import”. (Morrison, 2015) Sales from a foreign affiliated U.S. firms in China totaled at 364 billion by 2013. (Morrison, 2015). What is also amazing is that China has the biggest U.S. treasury bonds and that keeps U.S interest rate low. Between 2010 to 2014 General Motor sold more cars in the Chine’s market than in the U.S. market and many U.S. firms participate in Chinese market to stay globally competitive. (Morrison, 2015). This kind of
Coates, B., Horton, D., & McNamee, L. (2014, January 1). CHINA: PROSPECTS FOR EXPORT-DRIVEN GROWTH. Economic Roundup Issue 4. Department of the Treasury (Australia).
understood through graphical representation. One should graph the supply of Chinese goods and services and demand for Chinese products by other countries. As Chinese policies are placed in effect the supply curve shifts to the right because of improved quality standards and higher production capabilities. Open-Door policies also indirectly increase the demand for Chinese goods and services due increased Chinese competitiveness on foreign markets.
... Additionally, the hurdles imposed by the government agencies will impact the cost of sourcing from China adversely and will have a negative impact on the profitability for the company.
The Political, Social, and Legal Environment of Business. Case Study Analysis: Union Carbide Corporation and Bhopal. A single slip in action may cause lasting sorrow. A slight mistake in operation at a Union Carbide pesticide plant in Bhopal, India, caused a lot of deaths and injuries. What a tragedy it is.
How attractive are the prospects for future profitability of U.S. steelmakers? Should Nucor consider expanding in this type of industry environment? Why or why not? Technological evolution in zones such as advanced computer systems, physical models, use of sensors and artificial intelligence have been incorporated in all stages of manufacturing, and this has not only reduced human labor but also ensures the production of steel is of higher quality, range of products and low
From the 1970s, there has been a wave of liberalization in China, which was introduced by Deng Xiaoping. This is one of the key reasons to the rise of China to be one of the economic giants in the world. In the last 25 years of the century, the Chinese economy has had massive economic growth, which has been 9.5 percent on a yearly basis. This has been of great significance of the country since it quadrupled the gross domestic product (GDP) of the country thus leading to saving of 400 million of their citizens from the threats of poverty. In the late 1970s, China was ranked twentieth in terms of trade volumes in the whole world as well as being predicted to be the world’s top nation concerning trading activities (Kaplan, 53). This further predicted the country to record the highest GDP growth in the whole world.
The current trade imbalance is caused in large part by intrinsic features of China's labor market and consumer base. The vast majority of China's 1.3 billion people still live in rural areas. China has, by some estimates, a surplus rural labor force of 120 million people, many of whom migrate to industrial centers to look for factory work, and drive down wages. As long as wages are low, the United States will continue to gobble up products made in China, while Chinese consumers will prefer to buy cheaper, homespun alternatives to American products. The rise in trade deficit with China has come at a cost to jobs in the United States, accordin...
To reduce 60% of total manpower, we have designed a 3-year action plan to specify the appropriate methods of cutting them. Also, we will provide solutions about how to handle projects on hand during manpower reducing and how to motivate the employees.
Basically, there are 2 major things happening in steel industry: globalization and consolidation between steelmakers. China as a leading consumer of steel also heavily influences the industry. The recent article from The Economist below actually answers both questions and gives great examples :
The companies I have selected for this assignment is Malaysia Steel Works (KL) Bhd (5098) and Kossan Rubber Industries Bhd. (7153), both of the company is from industrial products sector and its share is traded in main market.
Its phenomenal success is because it developed some suitable public policies, which were the perfect fit for the situation in China. In the last few years, China has had a remarkable economic development and has come to play an increasingly significant role in our world economy.
...st and stand in the world. It is predicted that China will one day be the largest economy growing country in world. They continually growing and rebalancing their world to be the best. The growth of economy will depend on the Chinese government comprehensive economic reforms that more quickly accelerate in China transition to a free market economy. The consumer demand, rather than exporting the main engine of economic growth; boost productivity and innovation; address growing income disparities; and enhance environmental. (Morrison, 2014,para2)
China has also expanded their trading industries with countries such as South Korea, Japan, Taiwan, ASEAN, India, Russia and Hong Kong. This has not satisfied the Chinese greed for income as they also export and import goods to American countries, name...